Quote from: The Pharmacist on May 13, 2015, 10:56:32 PM

Quote from: GreenStox on May 13, 2015, 06:35:08 PM

Bitcoin will go viral, i`m sure of that.

There are sooooo many ifs that you have factored, perhaps wrongly, into your surety.

But my response was to btc being useful for a retirement account. I called it a currency. Is it a currency or an investment?

If it's a currency, then the best thing for it would be price stability. In that case, btc would be absolutely horrible to sock away for retirement, because inflation would eat it away--and I mean inflation of fiat, because I do not expect the major currencies to collapse in our lifetimes, and since things are priced in fiat and btc is largely purchased with fiat, btc is tied to fiat. I could be wrong.

If it's an investment, what justifies it's price? It represents no earnings as a stock does, or debt like a bond does. It's major advantages are as a currency: it's quick to transmit and the fees are very low. It's not even a physical thing like precious metals, art, or stamps.

You might be sure btc will go viral, but I'm not so sure it'll be around in 20 years. Again, I could be totally wrong.

Inflation of fiat money is exactly the reason you should use bitcoin as retirement savings, since it is anti-inflation, or even better, deflation. Its purchasing power would increase long term wise. A 100% increase in 4 years time frame seems to be guaranteed due to reward halving every 4 years

As for investment, at a higher level of abstraction, all the investment is about growing your purchasing power. You receive some stock dividend or bond interest, but if those income and principal added together still bring you less purchasing power (due to hyperinflation), then that is a bad investment. However, if you hold bitcoin and its purchasing power doubled or even quadrupled during a hyperinflation, that's a good investment

It is difficult to imagine where is the bitcoin's value established upon. Again, at a higher level of abstraction, value is all about trust, as long as there are some people trust bitcoin and willing to accept bitcoin in exchange for other valuables, it has some people backing it with real world resources. Although those backing is very distributed, they are all volunteer, which is very different from a government-backed-currency (typically forced upon its citizen domestically). Some day in 2009, north Korean government decided to abandon its currency and go for a new one, no one could against it and people with lots of cash saving lost a fortune. But for all the bitcoiners around the world to abandon the bitcoin at the same time is very unlikely if not totally impossible. From this point of view, bitcoin's value also comes from its non-political nature